CoOpportunity Liquidation

posted by Chris Hagenow | 777.80pc
January 30, 2015

The Iowa Insurance Division has asked for a court order to liquidate CoOportunity Health, marking the first failure of an Iowa insurance company in 26 years and the first of the nonprofit cooperatives spawned by the Affordable Care Act. Iowa Insurance Commissioner Nick Gerhart took over the company’s operations in December when the company began to look unhealthy. He announced last week that the liquidation would likely take effect on February 28. CoOportunity enrolled both Iowa and Nebraska customers, and about 68,000 still have insurance through the fledgling company. Both states have special funds designed to protect customers when one of their insurers falter. The Iowa Life & Health Insurance Guaranty Association is paying the claims of Iowa customers. CoOportunity enrollees--especially those receiving federal tax credits to pay for coverage--are strongly recommended to find new insurance quickly before the February 15 open-enrollment deadline. Employers with coverage through a group market have more time to switch companies but only about 30 to 45 days after the liquidation. The Affordable Care Act created 23 nonprofit insurance cooperatives to help spur competition in the insurance market. But according to the IID, the company’s large population of high-cost enrollees created too much financial pressure for CoOportunity to sustain itself. The federal government also failed to provide $126 million that was supposed to protect companies with high-risk enrollees, a cash crunch that also prevented CoOportunity from obtaining private loans.